WASHINGTON — President Bush disclosed Thursday that L. William Seidman, the outspoken, independent bank regulator who was put in charge of the federal government's massive S&L bailout, will be replaced soon by William Taylor, a longtime Federal Reserve official.
Seidman, who only two days earlier had been resisting White House efforts to push him out the door immediately, has not set a date for his departure as chairman of the Resolution Trust Corp., but reached agreement with Bush Thursday morning on his successor.
"We're very high on (Taylor) to take over his responsibilities," Bush told reporters during a press conference.
Seidman, who ran afoul of White House officials because of his popularity on Capitol Hill and his frequent warnings about the rising costs of the S&L cleanup operation, is expected to leave shortly after June 30. He also will leave a companion job as head of the Federal Deposit Insurance Corp., which guarantees bank deposits.
The S&L bailout agency, which got off to a slow start and has been beset by bureaucratic snafus, is trying to make up for lost time by rushing to complete the shutdown or sale of 141 failed thrifts by that date.
Taylor, the Fed's former top banking regulator, has been serving since mid-February in the key operating position on the government oversight board established last year as part of the Rube Goldberg-like mechanism responsible for the disposition of hundreds of failed thrifts.
Taylor, 50, who is expected to easily win Senate confirmation, was recommended by Seidman, Bush said, and is well respected on Capitol Hill. But he commands little of Seidman's political clout.
The change will remove Seidman, a proud 69-year-old who made his fortune in the accounting business, as a controversial thorn in the side of the Administration. But it could cost Bush considerable good will in Congress over the handling of the S&L bailout.
"Bill Seidman is going to be missed," said Rep. Bruce F. Vento (D-Minn.), a member of the House Banking, Finance and Urban Affairs Committee who has been closely involved in S&L legislation. "It's going to take a while for Bill Taylor to demonstrate his own independence."
Seidman had said earlier that he planned to leave office before his six-year term expires at the end of 1991. But he made clear that he wants to make substantial progress in getting the costly S&L cleanup running more smoothly before stepping aside. As the head of an independent agency, he cannot be fired by the President except for gross violations of federal laws or regulations.
"Bill Seidman deserved better," said Kenneth Guenther, executive vice president of the Independent Bankers Assn., a lobbying organization. "The way the White House mishandled this leaves a bad taste in the mouth."
Guenther, while conceding that "it will take years for Taylor to work up the clout Seidman had on the Hill and with the press," said he probably is the person best qualified to replace Seidman.
Bert Ely, an independent banking analyst based in Alexandria, Va., also praised Taylor's background and experience. But he said Taylor "has not demonstrated Seidman's political savvy, and his somewhat brusque manner could cause some tensions at the FDIC."
Separately, Bush also said he plans to meet with top congressional leaders Sunday to begin talking about how to reach agreement on next year's federal budget.
Bush, however, once again avoided stating whether he would go along with substantive tax increases to cut a deal with the Democratic-controlled Congress.
"Nice try," Bush replied to a reporter who tried to press the President to define his position on tax increases.
"We sent a budget up and, OK, so nobody was too enthusiastic about it," Bush conceded. "Nobody's so very enthusiastic about the Senate budget. Nobody's very enthusiastic about the House budget."
The conflict between Congress and the White House over spending and tax priorities is further complicated this year by the soaring cost of the S&L bailout and the wider deficit gap that must be bridged because of weaker-than-expected economic growth late last year and higher interest rates since the beginning of 1990.
But no breakthrough is expected soon. "We're not into a negotiation," Bush said. "We're talking process."
Seidman was always an independent soul, but that apparently was his undoing. D1
William Taylor is a respected bank regulator who wants to keep a low profile. D1